Newsflash: Health care is expensive and will continue to get more expensive!

Oh, and don't think your raise is going to increase to even compete with the cost of living.

Employee contributions, on average, will go up $156 per employee to $2,040, an 8 percent increase. Employees are expected to get less than 4 percent in pay raises on average in 2008, Towers Perrin said.

"Increasing employee contributions, deductibles, co-pays and premiums are causing many workers to opt out of their employers' health plans," said David Guilmette, a Towers Perrin consultant.

The experts are also predicting that employees will be shelling out 10% more for out-of-pocket health care expenses to the tune of $3,597 in 2008. What the article doesn't say is if this is for a single employee, employee with spouse, or employee with family coverage. Guess I wasn't too far off in wanting to have my health care fund to be $3,000. Basically, this is going to suck. Like, a LOT. Especially for low-wage earners and retirees.

I'm bringing all of this up because it's annual enrollment season at my employer. That glorious time when we realize how much more the middle class is going to take it up the ass for another year. My employer sent out a firm-wide communication about the upcoming changes to our annual enrollment. First, they wanted to remind us that the cost of health care is rising (you don't say!). Then they mentioned that on average, the cost for medical (not including vision and dental) will increase about 6% for most employees of the firm. It won't be until later this month when we learn what the real numbers are. I'm very interested to see what the price tags are because there's a pretty good chance I'll be having surgery next year, so I wanted to elect more coverage. I'm curious to know how much that higher coverage is going to cost me. I'll keep you posted.

But wait, there's more!
There are a bunch of other health care changes they are making, but they are also changing up the 401k. Below are the changes that caught my attention.

  • They are adding "target retirement portfolios "to help diversify your investments and meet your goals for a target retirement date without having to select your own mix of funds." That sounds interesting.

  • For those who haven't started a 401k yet, they added a feature that will make it very quick and easy for people to sign up, and will automatically default to one of the target retirement portfolios depending on the age of the employee. Of course, this can all be changed later.

Seems to me that they are trying to get people to start saving for retirement, which makes me wonder how many people at my company have a 401k account. Not enough, apparently, so hopefully this will get more people to start saving.

So there it is folks. To those of you lucky enough to get health care offered through your employer, pay attention to the communications about your health care benefits over the next month or two.